Ghana Abolishes IMF-Linked Taxes in 2025 Budget

Ghana's government has announced the removal of several COVID-era taxes, including a one-percent levy on mobile money transfers and a VAT on motor vehicle insurance, aimed at alleviating economic pressure on citizens amid high inflation and currency depreciation. Finance Minister Cassiel Ato Forson presented these changes in the 2025 budget, characterizing the taxes as 'nuisance levies' that were initially implemented to secure a $3 billion bailout from the IMF. While the removal of these taxes is expected to boost disposable income and support business growth, concerns have arisen about how the government will address the resulting revenue shortfall. To counterbalance this, the government plans to amend the Revenue Administration Act and enhance road toll collection as part of an infrastructure initiative. Economists express skepticism about whether these measures can adequately replace lost revenue and ensure fiscal sustainability. The IMF has cautioned Ghana about the importance of comprehensive fiscal reforms to manage its ongoing economic crisis.